Golden, Colorado wants nothing to do with toll roads. Last month, the city sent a 48-page report to investment firms that had expressed interest in being part of a tolled beltway project near Denver. The city warned that this would be an unwise investment and even set up a website, ReallyBadDeal.org, to outline the case against the toll road.

"We are committed to informing the public, especially when it comes to issues that will deeply affect our communities like the proposed Jefferson Parkway plan," the site explains. "Golden took this unusual step because it is concerned that Jefferson County and the cities of Broomfield and Arvada have become fixated on the fantasy of luring a private investor to underwrite the cost of the Jefferson Parkway. As a result, these local governments are not focusing on realistic transportation solutions needed to ease the region's congestion."

The city commissioned the financial analysis firm CRA International to conduct a review of the tolling plan. The city is so confident in the financial analysis that it will contribute $10,000 to any investor interested in hiring an independent review firm to offer a second opinion.

The report shows that toll revenue would not cover the full construction costs of the proposed project, mostly because by 2030 the total amount of daily traffic would not exceed 15,000 automobiles -- a low figure by highway standards. The primary reason for low volume is that the proposed route does not connect common destinations. Optimistic forecasts are nothing new in Colorado. The E-470 toll road forecasts have already been 40 percent below expectations.

"Given the financial, legal and political risks, this is an especially poor investment prospect," the city explained in its letter to investors. "It maximizes possible risk to investors and provides little or no potential return."

The report also challenges the Jefferson Parkway Public Highway Authority's construction cost estimate of $200 million to finish the project by citing Colorado Department of Transportation figures that show $431 million would be more accurate. Based on the revised construction cost, maintenance expenses based on the figures from nearby toll roads and traffic expectations, the toll road would see net operating loss of $6.5 million by 2013.

"Under these circumstances, it cannot be assumed that a rational investor would incur both the revenue risk and the construction cost risk associated with this project," the report concluded.

A copy of the full report is available in a 500k PDF file at the source link below.